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It may be a truism to say, but online gambling only survives if people gamble. Considering online gambling exists on apps, app engagement is a primary concern for operators. That’s especially true in the US, where most of the industry is about three years old.
The problem is, 25% of all downloaded apps are only used once. Compounding that overall abandonment issue, US gambling apps aren’t nearly the most popular ones. They trail behind social networking, email, search, shopping and other apps that allow people to go about their daily lives, like weather updates.
Even worse, only 32% of all downloaders will use any app 11 times or more, according to Boston-based mobile app marketing and analytics software provider Localytics. Both those figures come from a study of data from 2 billion devices, conducted in 2019.
At the moment, many of the operators aren’t even thinking that long-term. Large numbers of downloads are nice, but apps have to be used in order for operators to make money. That means focusing on customer engagement, not only acquisition.
This is the fourth part in a series of articles on iGaming marketing strategies. The previous installment looked at how the market leader, BetMGM is working on app engagement, while this article considers the problem more generally. Earlier installments covered brand awareness through TV ads, and reducing customer acquisition costs.
How operators can improve app engagement
App engagement in online gambling is all about retaining customers. Keeping bettors coming back is already a challenge in a mobile world that’s dominated by social networking apps. So here’s how operators can do that:
Don’t get in the way
Users download online casino and online poker apps so they can gamble. If they can’t gamble – because the app isn’t working or they’re being directed to other features – they may get frustrated and bounce. If they leave the app in frustration, they may not come back. Reliability is key.
Maintain a trustworthy image
This may seem subjective, but there are some measurable aspects to brand trustworthiness. Online operators which have an existing chain of land-based casinos have the advantage in brand recognition and, by extension, customer trust. Hence, brand awareness campaigns are extremely important for digital-era newcomers. Regulation is helpful here, as having the state’s seal of approval goes a long way towards showing the customer that they can trust the company.
Business relationships count too. Association with other trusted brands is helpful, but any questionable dealings can hurt. For instance, when DraftKings Casino app users click on the deposit icon, they’re directed to a landing page that bears the logos of five national and regional banks, as well as PayPal and the Cash App. That’s great, but at the same time, the company may face a class action lawsuit from its shareholders over its acquisition of SBTech, which has been accused of black market dealings. The company one keeps can cut either way.
Choose the right bells and whistles
Bonuses, gamification and social networks are nice and can increase app engagement and retain customers. However, just like business relationships, they can be a double-edged sword. Bells and whistles are only good if they don’t violate the first principle of engagement: that is, so long as they don’t get in the customer’s way when they’re trying to find a game or place a bet. After all, those are the fundamental reason gamblers are using the apps.
As Localytics put it:
“Increased abandonment is normally an unfortunate side effect of not leading users to value quickly enough after they open an app. Much of what keeps them coming back for more is their initial interest.”
Where operators need to be for maximum app engagement
The dream for online casino and poker operators would be to rival TikTok, Zoom, Instagram, Messenger and Facebook, at least among their own target audience. Aside from Zoom, all of these are owned by Facebook.
Last month’s CasinoBeats Summit included a panel session titled Gamification – The Language of Loyalty. One panelist was Stefania Mincu, CPO of Ellmount Group, a Stockholm-based tech company serving the gaming industry.
Her advice to operators was:
“You want to be in between those five favorite apps.”
While she was addressing a European audience, the desire of operators to produce of top-performing app transcends borders.
However, no matter what market we’re talking about, online gambling app downloads are going to rank far below the most popular ones in terms of downloads. As popular as gambling is, it will never be as universal as social media.
What Mincu means by being “between those five favorite apps” is for the gambling app to be among the top five most frequently used by their customers, rather than the general public. However, the customers in question are likely also using those apps which are popular with the general public.
Even if gambling apps can’t compete with social media for downloads, they can compete for engagement. This has to be done responsibly, however, as there’s a fine line between engagement and problem gambling.
Apps vary in popularity
To quantify the download gap, about 89 million Americans downloaded TikTok in 2020 alone, according to the Business of Apps. The number 10 app, Netflix, got 45 million.
The consumer data company Statista lumps iGaming and skill-based games with real money stakes together with other types of game apps. That puts them in what it says is the most popular overall app category, accounting for a quarter of all active apps among Apple users. Android users are more diverse in what apps they use:
“Gaming apps are the most popular category among Apple users, accounting for 25% of active applications. Tools, communication, video players and edit, travel and local are the leading Android app categories worldwide.”
No US gambling company comes close to those figures. For context, the casino operator with the largest market share – BetMGM Casino – enrolls all of its online bettors into the loyalty program for MGM Resorts International. BetMGM is a joint venture between MGM Resorts and the European gambling giant Entain.
That loyalty program, M Life Rewards, has a total of 36 million members, MGM revealed in its Aug. 4 earnings call. However, that’s an all-time figure, and includes sports bettors, online poker players and retail casino customers, in addition to online casino users.
Even if those 36 million members were all online casino customers, The No. 10 app, Netflix, clocked 45 million.
iGaming app engagement benchmarks are hard to find
While operator revenue is available through quarterly reports and state tax documents, app downloads and engagement aren’t public record. To the extent that operators are interested in disclosing those figures – to investors, say – they do so at their discretion.
DraftKings is an operator with a large market share that’s transparent about its app engagement and user retention. On Aug. 6, DraftKings reported Q2 pro forma revenue growth had been “driven by strong engagement across our core product offerings.”
DraftKings CFO Jason Park said during the same announcement:
“We grew Monthly Unique Payers by 281% and Average Revenue Per Monthly Unique Payer by 26%.”
DraftKings says it now has a total of 1.1 million monthly unique players, creating an average of $80 in monthly revenue per customer for the company.
However, that isn’t all from DraftKings Casino. It also includes DraftKings Sportsbook users, as well as its daily fantasy customers. Furthermore, only a fraction of registered users are active in any given month. As of last year, the company said it had roughly 8 million registered users. That number is surely north of 10 million by now.
Not all of DraftKings’ competitors are equally keen on discussing engagement levels and numbers of registered users. It is, however, commonplace for an operator to have many more inactive accounts than active ones at any given time.
For now, the US online gambling market is still rapidly expanding, with new states coming online each year. Once that slows down, recruiting new users will become more difficult. That, in turn, means that it will only become more important for operators to maximize the percentage of existing accounts they can keep active.